Paramount has gone straight to Warner Bros. Discovery’s shareholders with an all-cash offer for the company that it says is more valuable than Netflix’s deal announced Friday.
Paramount was widely expected to be the frontrunner for Warner Bros. But WBD opted for Netflix, which it said offered a more lucrative deal. The proposed marriage with Netflix caught Hollywood insiders by surprise — including Paramount CEO David Ellison, who still contends that his deal was the better offer.
“We’re sitting on Wall Street, where cash is still king,” Ellison told CNBC in an interview Monday. “We are offering shareholders $17.6 billion more cash than the deal they currently have signed up with Netflix. And we believe when they see what it currently in our offer, then that’s what they’ll vote for.”
Paramount offered $30 per share in an all-cash deal for the entire company, while Netflix offered $27.75 for Warner Bros. and HBO — $23.25 per share in cash and $4.50 in stock. Netflix believes the eventual spinoff of WBD’s cable assets, including CNN — not included in the Netflix deal — will be worth several dollars per share that will ultimately be worth more than Paramount’s offer. Paramount, unlike Netflix, is seeking to buy WBD in its entirety.
On Monday, Paramount said WBD shareholders should decide.
“WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company,” Ellison said in a statement. “Our public offer, which is on the same terms we provided to the Warner Bros. Discovery Board of Directors in private, provides superior value, and a more certain and quicker path to completion. We believe the WBD Board of Directors is pursuing an inferior proposal.”
In addition to his contention that his deal offers WBD shareholders more overall value, Ellison also made the argument that Paramount’s offer stands a higher chance of regulatory approval. He noted to CNBC that Netflix’s offer would combine the No. 1 streamer with HBO Max, which is No. 3 — a potentially unappealing prospect for skeptical antitrust authorities.
Ellison touted his positive relationship with President Donald Trump (who similarly noted Sunday that he has a strong relationship with Netflix co-CEO Ted Sarandos).
“I’m incredibly grateful for the relationship that I have with the president,” Ellison told CNBC. “And I also believe he believes in competition. And when you fundamentally look at the marketplace, allowing the No. 1 streaming service to combine with the No. 3 streaming service is anticompetitive.”
Ellison also appealed to consumers and the industry. He told CNBC on Monday the Netflix-WBD deal would spell “the death of the theatrical movie business in Hollywood.”
“It’s bad for the consumer, it’s bad for the creative community,” Ellison said. “We’re sitting here trying to save it.”
By CNN
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